A concept Paper for Report on Insurance Industry in Nepal

Concept Paper

General overview of Insurance Industry of Nepal

Insurance in Nepal is still in the growth stage despite being 65 years old. The first insurance company was established in Nepal in 1947. Before that some insurance companies from India were operating in Nepal. The development of insurance business is closely related to the beginning of industrialization in Nepal around 1940. The first joint stock company, Biratnagar Jute Mills, was established in 1936. The first bank, Nepal Bank Limited was established in 1973. During that period many industries came up in the Terai belt. The Second World War began immediately after. Indian entrepreneurs came to Nepal to establish factories. There was a need for the factories to be backed by insurance. Indian companies took the initiative to ensure those industries. Nepal bank provided loan to entrepreneurs. To insure these loans, Nepal Bank established Nepal insurance and transport company in 1947 as its subsidiary which was truly first Nepal insurance company. That company now operates as Nepal Insurance Company. Now 65 years after the first Nepali insurance company set up, there are 10 insurance companies with more than 450 branches throughout the country. In terms of number of companies, number of policies sold and revenue earned, there has been spectacular rise in the insurance business. There are still many areas that the Nepali insurance sector has not been able to cover, but there is no denying the act that the sector is witnessing accelerated growth. Beema Samiti (Insurance Board) an autonomous body, established to develop, systemize, regularize and regulate the insurance business of Nepal under Insurance Act, 1992.

Purpose

This report is prepared to get insight of Nepalese insurance industry. Insurance is becoming the matter of concern in every sector. But still very few are in the coverage of insurance industry. There are still more than 25% of total populations who have strong financial condition to receive insurance. But why they are not interested to get insurance? This report will also focus on this question.

Methodology

This report will be prepared by using primary and secondary data. Primary data are collected from direct interaction and discussion with professionals and secondary data are collected from different insurance company and insurance board.

Anticipated Outcomes/ Benefits

There are very few studies regarding the insurance industry. This study will benefited all the parties who have concern with and interest in insurance by unearthing the current and possible challenges, opportunities and by providing solution to reap benefit and the way to escape from difficulties.